House Budget Chairman Paul Ryan, R-Wisconsin, will unveil a highly anticipated 2012 Republican budget next week that proposes dramatic changes to political lightning rods: entitlements.
The plan, to be released Tuesday, calls for a controversial overhaul of Medicare, the health care program for seniors, and imposes deep cuts in Medicaid, which provides health benefits to low-income Americans, according to House Republican sources with knowledge of the proposal.
Starting 10 years from now, in 2021, Americans would no longer enroll in the Medicare program, but instead receive vouchers for private insurance, according to the GOP sources, who stressed anyone 55 or older now would not be affected by the change.
The plan is modeled after one Ryan proposed last year with Alice Rivlin, budget director under President Bill Clinton.
Details of how Ryan’s Medicare voucher program would work are still unclear, but the Ryan-Rivlin plan said the amount of the voucher — a lump sum payment from the government — would be calculated in part by taking the average federal cost per Medicare enrollee.
The GOP aims to save billions of dollars in revamping Medicare, a large contributor to the massive federal deficit and debt.
Sources said they did not yet know how much savings Ryan would project by drastically changing the Medicare program.
On Medicaid, Ryan’s plan calls for deep cuts, as much as $1 trillion. The program would also fundamentally change — the federal share of the Medicaid system would become block grants to the states.
CNN has been told that the House GOP budget plan does not call for significant change to the Social Security program. Republicans argue that while Social Security is a factor in the nation’s fiscal crisis, it doesn’t contribute as much to the soaring debt as Medicare.
Two House GOP lawmakers briefed on the proposal told CNN they and others on the House Budget Committee believe it’s a mistake not to tackle Social Security.
As for so-called discretionary spending, one of the sources — who would not speak on the record before the plan is publicly announced — said Ryan’s proposal promises to roll back spending to 2006 levels.
It’s unclear how much that would slash, but it is expected to be far more than the roughly $61 billion in spending cuts House Republicans passed in February.
Ryan is expected to give specifics on how much savings the plan would create when it is unveiled Tuesday.